Our observer soon learnt to stop pulling out his credit card in Germany, where
debt is frowned upon, and cash is king

If there’s one thing Germany is never running short on, it’s cash. Not that you’d believe it when you live here: potholed road surfaces and granny-killing cracked paving are temporarily signposted for years on end with the term Gehwegschaden, which translates facetiously as "no money for repairs".

And when old Nanny Gerda does snap an ankle and take a (bumpy) ambulance ride to hospital, the geriatric unit she wakes up in may well be facing closure.

Yes, if there’s one thing everyone in Germany is in agreement on, it’s that the place has been kaputtgespart – literally "economised to breaking point". Heads of business, union bosses, and long-suffering commuters unite (a rarity in any country) to complain about the decrepit infrastructure, demanding investment from one of the world’s wealthiest governments. In reply, said government simply points at the new law more or less forbidding state borrowing from 2016 – or would point, if its hands weren’t tied by that very law.

That, though, is the other issue that everybody in Germany is agreement on: debt is bad. Even if it is taken on to pay for something good or necessary, debt comes loaded in Germany – loaded with guilt, since the word for both is Schuld. There’s only one form of money Germans trust: cash.

I got my first lesson in the German mistrust of debt very soon after moving out here, when I tried to pay for a celebratory round of beer and pork with my UK card. The waitress looked at me as if I had landed from Mars – or been teleported from some gleaming, cashless future – and explained that, if I really didn’t have the readies, a German direct debit card would be fine, but nothing with embossed digits and "credit" stamped on it.

Soon enough, I was in possession of one of those flimsy debit cards (which, quite frankly, a three-year old could copy convincingly) and the German bank account to go with it. Around a year later, I lost my wallet, and – in view of the fact that many shops and restaurants still don’t have chip and pin out here – I was in a hurry to cancel said cards.

I rang up my bank and explained the situation. "Of course, we’ll see to that right away, Herr Melican,” said the friendly bank operative. "Now, what about cash?"

"Well, I suppose I shall just have to go to the counter," I replied.

"No: how much was in the wallet when it went missing?"

"Hmm, I don’t know. Seven euros or so? But I should imagine that someone will have pocketed that if it gets handed in …"

"No no, you have a cash loss insurance policy of up to 500 euros as part of your account package. How much did you say was in there again?"

"Well, if I did have a note or two, they couldn’t have been anything except fives."

"Herr Melican, allow me to repeat myself: you have cash loss insurance, ie we replace any cash lost in your wallet. Now, are you sure those notes were fives, or mightn’t they have been hundreds? Both kind of green-coloured, aren’t they…?"

I’ll leave you to guess how I responded to this but – speaking of offers you can’t refuse – what struck me on reflection was that even ordinary Germans carry around bundles of cash in amounts that the British would consider the hallmark of a hardened mobster, not of the kind of work-a-day guy who needs insurance policies to keep himself from penury if his cash disappears.

However annoying the German distrust of credit may be, the trust placed in people to be honest in everyday situations is genuinely heart-warming: they don’t even have ticket barriers on the underground out here.

In Germany, it is neither manners nor clothes that maketh the man (as witness the country’s congenital inability to queue and current obsession with Ugg boots – for men). It is cash. I once saw a notice at a baker's shop in Munich which read: "For safety reasons, no €500-notes". There was so much wrong with this that I didn’t know where to start: firstly, I wasn’t aware that €500-notes were, beyond being hugely convenient for forgers, actually unsafe. Are they flammable? Explosive? Riddled with asbestos? Perhaps more importantly, though, somebody must have actually tried to purchase baked goods with a banknote of that denomination. I mean, just how big can your family/wallet/stomach be?

Germans just do set great store by cash, even at Christmas, which coincides with the end of the fiscal year and, thus, bonus season. Credit is hard to come by here anyway: many cards have charges, mortgage rates remain uncompetitive and house deposits are expected to amount to at least 30 per cent. Germans tend to explain this part of their national psychology as being due to the trauma of hyperinflation in the 1920s; which, to my mind, is not entirely plausible. Surely the logical conclusion to draw from the extreme devaluation of money is that debts get smaller as inflation progresses and that bricks and mortar are about the only investment immune?

No, Germany just doesn’t "get" debt. Which explains why its banks have trouble differentiating between loans for people to buy houses and governments to repair roads (generally good) and advances for overly extravagant Christmas gifts and useless money-burning state initiatives (usually bad). So rather than give much credit in their country, lots of German banks spent the 2000s investing their huge cash reserves abroad – and took a real clobbering in 2008. As it turned out, many of them had invested customers’ cash savings in worthless credit-default-swaps from America that they simply didn’t understand.

In fact, in their inability to grasp debt properly, Germans greatly resemble the Americans or us Brits; they’re just far worse at ignoring their own failings. Which, in terms of economic stability, mightn’t be such a bad thing. As long as Nanny Gerda’s still got a few €500-notes stashed away to pay for private health care ...